Expropriation and nationalization of private oil properties, and the growth of government oil companies, extended public ownership in oil. However, the primary result of postwar government petroleum policies was to enhance competition in the industry. Governments encouraged new entrants, which diffused the structure of the industry. The number of competing firms increased, and the market positions of the largest international oil companies declined, reducing concentration. As the entrants developed more concession areas, the growth of petroleum supply relative to demand accelerated, intensifying competition in both crude oil and product markets, and depressing prices and rates of return on investment.

In a world market that was free of all taxes, royalties, or other governmental constraints, and in which competition was effective, the price of oil would be very low. But the real-world market for oil is dominated by high taxation by the oil-exporting nations, and, since 1972, by concerted efforts of the members of the OPEC to raise prices and to restrict output. Because of effective competition in the industry and the power of OPEC, an international oil company today has relatively little influence on the price of oil to consumers.

The decline in natural-gas revenues has been dramatic and the degree to which we are dependent on oil revenues, it is time for us to consider an increase in corporate and personal tax.

It is unconscionable that this government charges more royalty on the sale of our very own natural gas from Malampaya than it taxes imported coal and fuel. We pay P1.40 per kilowatt hour for electricity from generated from natural gas and only P.17 per KWH from coal. Does that make any sense to you?

While only a minority of people was taxed during World War II, the politicians got a taste of the huge revenues... by expanding the tax base. After the war... the income tax was steadily expanded until it applied to most Americans...

The competition of government oil companies with private enterprises was often buttressed by monopoly privileges, public preferences, low-priced capital, special tax benefits, or freedom from the commercial obligation to earn a normal return on investment. These government companies, regardless of whether they had complete or partial monopolies of oil production and trade in their own countries, were part of the structure of the foreign oil industry. They could not be dismissed as ‘noncompetitive’ with private oil enterprises.

My preference is to have the wellhead tax receipts go to tax rebates. There are some alternatives that obviously will .be considered by the Congress with or without my approval, and I can't say that my own position will prevail ultimately. But there are different ways to use wellhead taxes. My preference is, as we presented it to the Congress, the rebates. One reason for that preference is that it's fair. Another one is that it doesn't create a tremendous withdrawal from the national economy of substantial amounts of money. If you have increased wellhead taxes and immediately return that money to people in better paychecks on a 2-week basis, then there's not a shock to the country. If you withdraw that money and wait 3 months, 6 months, or a year before it gets back into the economy, you have a tremendous dampening effect on our national economy, which is bad. Now, if some of the wellhead tax should be shifted to enhance the effectiveness of the energy goals, then I can't see anything very bad about that. If you had better rapid transit systems, better insulation of homes, more research and development, for instance, for new energy sources, that would be one thing. But the constant threat is that because of political pressures, that money is going to be returned to the oil companies under the guise of enhancing production. I think the oil companies have enough cash flow right now-- certainly the majors do--to have an adequate degree of exploration. In fact, that exploration, in my opinion, is adequate at this point. And I'm just as afraid that there is a threat that the wellhead tax is going to be given to the oil companies to reward them financially. I think that our package has a gracious plenty of incentives for enhanced exploration and enhanced production of oil in this country. We have by far the highest price for newly discovered oil in this energy package of anywhere on Earth, and I don't think the oil companies deserve to get this money taken out of the consumers' pockets and put in the pockets of the oil companies.

Foreign oil companies suffered major expropriations of their property during the postwar period, usually without payment of full compensation to the private owners. These episodes—the most significant were in Algeria, Ceylon, Cuba, Egypt , Iran, Libya, and Peru—followed by many years the first major oil industry expropriation by the Bolshevik government of Russia in 1918 and a second major expropriation of foreign oil properties by the Mexican government in 1938. All illustrated the great latent power of governments over the international oil companies and the reality of the political risks inherent in the industry.

The postwar burgeoning of oil enterprises throughout the world wrought important changes in the structure of the foreign oil industry. Competitors multiplied, concentration of the industry was reduced, and the market positions of the ‘seven largest’ companies shrank.

The postwar tendency of foreign governments to intervene directly in the regulation of petroleum production and pricing contrasts sharply with the laissez-faire policies followed up to World War II. Formerly, rates of output and prices were almost entirely within the discretion of the private oil companies.

Since the corporate income tax began in 1909, Congress has imposed a penalty tax, currently 15 percent, on excess cash and near-cash... Without such, a corporation could... become a huge tax shelter, withdrawing resources from the economy instead of investing in new plant...equipment... jobs and paying dividends... But President Reagan signed a law that... so long as the money was owned by offshore subsidiaries, American companies could hold unlimited amounts of cash. ...[C]ompanies now siphon profits out of the United States under the guise of... tax deductible expenses...

There's another item I'd like to mention tonight, and that's the subject of energy. I presented to the Congress and to the American people last April, for the first time in the history of our Nation, a comprehensive energy policy. We had a severe blow in 1973 when the prices of oil were quadrupled almost overnight. And when an oil embargo was slapped on our country, that economically almost brought us to our knees. Other nations suffered the same challenge. They have reacted well. The consumption of oil in Germany, compared to 1973, is down. The consumption of oil in Sweden is down, France down, Italy down, Japan down. The consumption of oil in the United States since 1973 is up 87 percent. This year we are importing $45 billion worth of oil from overseas, half of the oil we use. And that's almost exactly the amount that we waste, that we don't have to waste. Notice that this is twice as much oil imported as all the agricultural products that we export. Something must be done.

Until the Civil War, the U.S. government relied almost exclusively on tariffs on imported goods, a practice that provoked conflict between Northern manufacturers who favored tariffs to keep imports out and Southern farmers who did not. An income tax was imposed during the Civil War, but proved so unpopular that it died in 1872. In its place, the government imposed taxes on alcohol and tobacco that accounted for 43 percent of all federal revenue by 1900. Repeated attempts to revive the income tax were thwarted when the Supreme Court declared it unconstitutional in 1895. But the Sixteenth Amendment to the Constitution changed that. Less than eight months after it was ratified in February 1913, Congress enacted an income tax.

[A]ssuming that all the... interest on the federal debt is paid, just from the individual income tax, all the income taxes that you pay from January through the end of April, just go to pay interest on the national debt; and since 86% of federal tax revenues come from labor (and 14% from capital); that means that we explicitly have a policy now to tax labor [in order] to transfer [that revenue] to [privately held] capital.